History of Trading in India

• Trading in India has been around for more than a century.
• It seemed to have been started during colonial times.
• But trading today is totally different from the trading of our ancestors.

When did trading start in India?

• Trading in India was started in 1840.
• It was the time when the incorporated companies started to arrive in India.
• Securities at that time were sold and bought at such exorbitant prices that only the British or some of the extremely wealthy Indians could afford them.
• The first boom in the stock market happened in India at the beginning of the American Civil War, with the British supply of cotton stopping from America.
• This made India the next best supply line by default.
• This also increased the production as well as the value of the manufacturers in our country.
• With this, the value of their securities also increased in the market.
• However, this boom ended just as soon with the end of the American Civil War.
• Due to this, we witnessed the first crash of the Indian stock market.
• Independent brokers were used for trading in India, which also made the stock market volatile to begin with.
• But immediately after the crash, the situation became much worse, and it was finally decided that an organization was essential in order to regularize trading in India.
• Along with that, it was also essential to maintain a balance in the stock market.

Regularization of trading in India

• The British government established the Bombay Stock Exchange (BSE) in 1875.
• BSE was also founded alongside it in the same year to train a new crop of traders as well as brokers in India.
• While BSE has been around for more than a century now, BSE sensex was created in 1986.
• This means that for 106 years, there was no singular method of measuring the average price of the securities as well as their flow in the stock market.
• Not only that, but trading through an electronic system did not even begin in India until 1994.

Trading in India before the computers

• The success rate of any trade is dependent on the accuracy of the available data on the securities in the stock market and also how fast the data can be delivered to the traders and executed by them.
• In the 21st century, this speed and accuracy are made possible by some of the really powerful centralized computers.
• Trading in the securities before the birth of the computers was a very long, drawn-out process.
• Most of the stock exchanges in the world switched over to an electronic trading system after 1985.
• But before that, everything related to trading was a manual process and thus required significant investment as well as manpower to even become a trader.
• The movement of the price and the securities would be sent over to the stockbroking firms by the stock exchange, which can then be converted into a usable graph.
• All the graphs that tracked the ups and downs of the securities and the general flow of the market were hand drawn.
• Each change in the price was also painstakingly recorded.
• This data was then sent over via telephone to the stock exchange.
• There, a representative trader would loudly declare the buy or sell order, and it would then be processed.
• This entire method of shouting and declaring your order is known as the Open Outcry method.
• This method was quite prevalent for most of the history of trading in India.
• Nowadays, we have more than a dozen stock exchanges in India.
• Even the electronic trading platforms are more streamlined and simplified by making it possible for the average person to engage in trading.

Conclusion

India had a rich history of trading, and this will also inspire you into all the work that was put into creating the trading system in India.

Frequently Asked Questions (FAQs)

Q1) Who is the old big bull of the Indian stock market?

Rakesh Jhunjhunwala is the old big bull of the Indian stock market.

Q2) What is the history of trade in India?

During ancient times, India was a leading exporter of silk, cotton, sugar, and precious stones.

Q3) Which is the No. 1 bull in India?

Pritam Bull is the No. 1 bull in India.

Q4) Who is the original big bull?

Premchand Jain is the original big bull.

Q5) Who came first for trading in India?

Portugal came first for trading in India.

About Us

Nifty Trading Academy is our academy where we teach you about the stock market as well as technical analysis. We also provide live trading sessions and upload blogs for the same.